- Banks’ Deposit Declines by N213bn
BANKS’ deposit fell by N213 billion in December, reflecting impact of the economic recession on individuals and businesses. Meanwhile, Federal Government’s Bonds, FGB, recorded significant sell-off last week leading to a fall in prices in both the OTC platform and the Eurobond market.
Banks are mandated to keep 22.5 percent of their total deposit as Cash Reserve with the Central Bank of Nigeria (CBN). Consequently, the apex bank, on a monthly basis, debits banks for 22.5 percent of any increase in bank deposit for the month.
However, if a bank records decline in deposit, the CBN credits the bank 22.5 percent of that decline in deposit.
Financial investigations reveal that last week, the CBN credited banks N48 billion for CRR for the month of December, implying that banks in the country recorded a decline in deposit to the tune of N213 billion.
Earlier in June 2016 the Financial Stability Report of the CBN for half year 2016, stated that “Banks’ deposit with the CBN fell by 12.50 per cent at end-June 2016, compared with the 3.84 per cent decline at the end of the second half of 2015.
The Report had indicated that banks’ deposit fell to N3.69 trillion at the end of June 2016, from N3.95 trillion at the end of December 2015. Similarly, the share of banks’ deposit in the total deposit with CBN fell to 35.1 percent in June 2016 from 42.3 percent in December 2015.
N84bn inflow moderate cost of funds
Meanwhile cost of funds dropped to previous level after rising by almost 100 percent during the week. From 7.0 percent at the opening of business on Monday, short interest rates (Overnight borrowing and Open Buy Back, OBB) rose sharply to 14 percent by midweek following outflow of N222 billion for purchase of treasury bills. This was further compounded by outflow of another N2.2 billion for foreign exchange purchase. Hence market liquidity fell from N174 billion on Monday to N17 billion on Wednesday.
Market liquidity was however revived due to inflow of N84 billion comprising N48 billion for CRR credit and N36.7 billion inflow from excess crude reserve. The inflows prompted market liquidity to rise and close at N56 billion.
Meanwhile the CBN will sell N195.9 billion worth of treasury bills this week in continuation of its effort to manage excess liquidity in the interbank money market. These comprise N36.77 billion worth of 91 Days bills, N39.17 billion of 182 Days bills and N120 billion worth of 364 Days bills. However due to inflows from payment of maturing bills of similar tenors and value, as well as inflow from statutory funds, the interbank money market is expected to be liquid this week with relative stability of cost of funds.
Investors dump FGN Bonds
Last week was a reversal of fortunes for federal government bonds, as there was massive sell-off by investors in Over-The-Counter (OTC) segment and the Eurobond segment.
According to analysts at Cowry Asset, a Lagos based investment firm: “In the just concluded week, FGN bonds traded at the OTC segment depreciated in value for all maturities amid sell pressure. The 20-year, 10.00 percent FGN July2030 debt10-year,16.39 percent FGNJAN2022debt, the7-year16.00 percent FGNJUN 2019 debt and the 5-year, 15.10 percent FGNAPR2017 debt depreciated by N0.67, N0.38, N0.39 and N0.14 respectively; theircorresponding yields rose to 16.30 percent (from 16.13 percent), 16.41 percent (from 16.24 percent), 16.37 percent (from 16.17 percent) and 14.82 percent (from 14.38 percent) respectively.
Elsewhere, FGN Eurobonds traded on theLondon Stock Exchange decreased in value across allmaturities amid sell pressure.The 10-year, 6.75 percent JAN28,2021bond, the5-year,5.13 percent JUL12,2018bondand the10-year,6.38 percent JUL12,2023bondlostUSD0.15 (yield rose to 5.75 percent),$0.35 (yield rose to 3.45 percent) and$0.32 (yield rose to 6.42 percent) respectively. This week, we expect a mix of bargain hunting and profit taking at the OTC market.”
CBN Grants Lotus Bank Non-Interest Banking Licence
The Central Bank of Nigeria (CBN) on Thursday, June 17, granted a non-interest banking licence to Lotus Bank Limited.
This was contained in a statement titled ‘CBN grants Lotus Bank licence to commence non-interest banking operations’.
The statement read in part: “Lotus Bank seeks to pursue the mission of creating value and growth for all through digital innovation and best-in-class customer experience for Nigerians.”
Commenting on the grants, the founder and managing director of Lotus Capital (the pioneers of non-interest finance in Nigeria), Hajara Adeola, said the bank was starting its operations on a solid foundation of experienced leadership and a strong advisory council of experts.
Adeola explained that the bank is managed by a team of seasoned professionals and financial experts led by the Managing Director/Chief Executive Officer, Kafilat Araoye, who has over 25 years of commercial banking experience.
She added that the institution’s focus and guiding principle is ‘to deliver an alternative option to interest-based banking and to cater to the needs of not just the banked but also the underbanked and unbanked population.
According to her, non-interest banking was geared towards supporting the real sector and Lotus Bank aimed to improve financial inclusion in the country.
The founder of the bank, however, disclosed that it would operate transparent pricing models as it was the norm in non-interest banking.
The statement added: “Our values are deeply rooted in partnership. A critical component of our mission is the provision of innovative solutions that drive ethical prosperity for all stakeholders.
“We pride ourselves on digital solutions that provide our customers with the convenience of unlimited access to our services and products.”
“Our products and service offerings will include non-interest business financing, deposit products (current, savings and investment accounts) and personal financing.”
Fidelity GAIM Season 4 Final Draw To Hold On July 22
One of the leading financial institution in Nigeria, Fidelity Bank Plc, has announced plans to enrich the lives of fifteen Nigerians with a total of 39 million Naira at the final draw of the “Get Alert in Millions Campaign (GAIM)” Season 4 savings promo, slated for July 22, 2021.
The savings promotion, which is specifically aimed at promoting the culture of saving among Nigerians, is one of the bank’s many initiatives aimed at rewarding new and existing customers for their unwavering loyalty and patronage.
Despite the fact that the promotion was halted in 2020 due to the Coronavirus (Covid-19) Pandemic and the resulting global lockdown, hundreds of Nigerians have benefited from this unique reward scheme in which lucky customers are credited with millions of naira and consolation prizes via a draw system.
The Chairman, Promo Committee, Fidelity Bank Plc, Mr. Richard Madiebo expressed his delight at the resumption of the savings promotion, stating that the campaign seeks to reward customers for their loyalty and patronage. According to Mr. Madiebo, for the past twelve years, the bank has empowered new and existing customers, providing an avenue for many to change their fortunes through its savings Promo.
He stated that the bank takes pride in keeping its promises, adding that the lender would continue to look out for innovative ways to satisfy and enrich its customers across the nation.
“And as we wind down on the 4th season of the GAIM promo, we are elated at the prospect of not only driving financial inclusion across Nigeria but also at the unique opportunity to enrich the lives of our customers especially in times of economic uncertainties”, noted Madiebo
Over the years, the leading tier two Bank has continued to intensify its efforts and innovate ways towards ensuring customer and stakeholder satisfaction. Through this promo, Fidelity Bank has promoted financial inclusion through digital channels and enriched the lives of its customers even in times of economic uncertainties.
Zenith Bank Gets Recognition for Best Corporate Governance
Zenith Bank Plc’s strong business ethos, ethical values, and impeccable corporate governance have been rewarded with ‘Best Corporate Governance’ Financial Services’ Africa 2021 award by the Ethical Boardroom.
The bank, in a statement yesterday, said the award, published in the June 2021 edition of The Ethical Boardroom magazine, recognised the bank’s adherence to global best practices and institutionalisation of corporate governance as well as setting an industry-wide example of best practices in that field.
Commenting on the award, Group Managing Director/Chief Executive of Zenith Bank Plc, Mr. Ebenezer Onyeagwu, said: “This recognition is a testament to our commitment to quality, accountability, fairness and transparency in our engagement with all stakeholders.
“It is also an affirmation of the bank’s professionalism, ethical conduct and sustenance of global best practices and standards which is attributable to the joint collaboration of the management and staff.”
The award comes on the heels of others and recognitions that the bank has garnered in recent times for its track record of excellent performance and commitment to global best practices.
For instance, Zenith Bank was voted as Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020; Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and 2021, and Best Corporate Governance’ Financial Services’ Africa 2020 by the Ethical Boardroom.
Also, the bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, and Number One Bank in Nigeria by Tier-1 Capital in the “2020 Top 1000 World Banks” Ranking by The Banker Magazine.
Similarly, the bank was recognised as Bank of the Decade (People’s Choice) at the THISDAY Awards 2020, Retail Bank of the year at the 2020 BusinessDay Banks and Other Financial Institutions (BOFI) Awards, and Best Company in Promotion of Good Health and Well-Being as well as Best Company in Promotion of Gender Equality and Women Empowerment at the Sustainability, Enterprise and Responsibility (SERAS) Awards 2020.
Zenith Bank has been generally adjudged a corporate governance compliant bank by the Nigerian Exchange Limited (NGX) hence its listing on the Premium Board of the Exchange.
The bank continues to sustain this reputation and reappraise its processes to ensure that its business conforms to the highest global standards at all times.
The bank places a premium on its core business strategy anchored on people, technology and service, to create value for its numerous clientele.
“With a team of dedicated professionals, the bank leverages its robust Information and Communication Technology (ICT) infrastructure to provide cutting-edge solutions and products through its network of branches and electronic/digital channels,” the statement added.
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